An excellent article from IASG helps you to navigate these murky waters if you take heed of the central message for successful speculation…..do not assume a normal distribution.

The key to your long term trading success lies in a simple diagram….the return distribution. It is very wise to become familiar with it, as it plots where the risks of trading lie …..”beware here be dragons”.

Non-normal distributions – Assume tail risks are higher than normal measurements

 

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